The recent bankruptcy filings of the crypto exchange FTX have brought to light escalating legal and advisory costs. According to the data in these filings, FTX’s advisors billed the exchange a staggering $121.8 million in fees and expenses for the period between February 1 and April 30. Sullivan & Cromwell, the law firm heading the proceedings, charged FTX $37.6 million, which accounts for 30.9% of the total fees and expenses. Conversely, investment banking firm Jefferies billed the lowest amount, representing only 0.6% of the total costs.
Restructuring consultants Alvarez and Marsel charged FTX $37 million, alongside more than $1.1 million in extra expenses such as meals and accommodations. These significant costs have instigated a movement among former clients to reboot the exchange under new leadership, with the aim of restoring value to customers. One notable supporter of this initiative is Travis Kling, Chief Investment Officer at the crypto hedge fund Ikigai Asset Management.
In March, Kling expressed his views on Twitter about how a relaunch could be one of the most positive outcomes for creditors, especially given the regulatory challenges faced by other major exchanges, including Coinbase and Binance. The FTX 2.0 coalition, as it’s now known, is spearheaded by the crypto influencer Loomdart, who has spoken at length about the possible restart on social media. Loomdart recently suggested that a properly executed FTX 2.0 could significantly cut down the time for creditors to regain their money.
As efforts to revive the exchange gain traction, FTI Consulting has devoted considerable time and billed fees amounting to $761,997.70 for work related to an “exchange restart,” as disclosed in the filings. The coming months will be pivotal in determining the fate of FTX and whether it can emerge as a new exchange from bankruptcy, potentially marking a turning point for the beleaguered platform.
While FTX’s mounting costs undoubtedly serve as a catalyst for these efforts, questions remain about the feasibility of reviving the exchange and the potential challenges associated with doing so. Will a rebooted FTX be able to regain the trust of its clients and compete with other major players in the industry? As the crypto markets remain unpredictable and the regulatory environment increasingly complicated, only time will tell whether efforts to revive FTX will ultimately be successful.
Source: Cryptonews
